During 2016, the Bowtie Company Reported Net Income of $1,872

question 47

Multiple Choice

During 2016, the Bowtie Company reported net income of $1,872 million, depreciation expense of $1,412 million and $978 million paid for purchases of property, plant and equipment. What would be the effect on cash flows from operating activities during 2016?

• A)Cash flows from operating activities would be increased by depreciation expense and decreased by the property, plant and equipment purchases.
• B)Cash flow from operating activities would be increased by depreciation expense and by the property, plant and equipment purchases.
• C)Cash flow from operating activities would be increased by depreciation expense but the property, plant and equipment purchases would have no effect on cash flow from operating activities.
• D)Depreciation is a noncash expense and would not be used to calculate cash flow from operating activities.

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Definitions:

Amusia

Tone deafness—inability to distinguish between musical notes.

Tone Deaf

A term often used to describe a person who struggles to distinguish between different pitches or reproduce musical notes accurately.

Physical Properties

Characteristics of a material or object that can be observed or measured without changing its composition, such as density, color, or melting point.

Sound Waves

Oscillations of air pressure that travel through the air or another medium and can be heard when they reach a person's or animal's ear.